17 March 2014 | Reading time: 3 minutes
The price is right.
Comparison advertising with two prices is frequently used as a powerful sales tool. Businesses often compare the price of a product with:
The danger with such price comparison advertising is the risk that it may constitute misleading and deceptive conduct under the Competition and Consumer Act 2010 (Cth). The Australian Competition and Consumer Commission (ACCC) regularly investigates such pricing strategies.
WAS misleading NOW costly!.
Statements such as ‘Was $150/Now $100’ or ‘
$150 Now $100′ are likely to be misleading if products have not been sold at the specified ‘before’ or ‘strike through’ prices in the period immediately before the sale commences.
Such statements are also likely to be misleading if only a limited proportion of a product’s sales were at the higher price in the period immediately before the sale commences. Guidance from the ACCC is limited on the periods of time and the volume and proportion of sales required saying only that it ‘will depend on the circumstances of each case.’1
Always on sale.
If a business has a practice of discounting goods when not on sale and uses two-price advertising in relation to sale periods, there is a risk that the use of two-price advertising will be misleading. The business would be representing to consumers that they will make a particular saving if they purchase the item during the sale period, when this may not necessarily be the case.
Other misleading comparisons.
Other examples of misleading price comparisons include:
The jewel in the ACCC’s crown.
In The Jewellery Group Pty Ltd (Zamel’s) v Australian Competition & Consumer Commission  FCAFC 144, the Federal Court imposed a penalty of $250,000 on Zamel’s for misleading consumers regarding savings made on jewellery.
Given that Zamel’s used statements such as ‘
$99 $49.50′ or 1WAS $275 NOW $149′ and its customers were unaware they could obtain discounts outside Zamel’s sales periods, the Court found that:
Practical tips for displaying two-price advertising.
Here are some helpful practical tips: